It is no surprise that young people are struggling to get onto the housing ladder, whether buying or renting, but a stark new report warns that we need to build for the older generation too.
It is significant that a major new report from the House of Lords Committee on Intergenerational Fairness and Provision says that increased housing costs is one of the biggest issues of the day for younger people but what makes it even more important is that it points out that older people need suitable homes as well.
Indeed, the sheer depth of the report tells us that even although the current Government is doing a lot to increase supply and increase standards in the private rented sector, the housing market is still suffering from a lack of action in previous decades, particularly in the social housing sector.
Overall, the committee found that the two youngest generations are devoting a greater proportion of their overall income to housing than previous generations. People born between 1981 and 2000 appear to be spending over one and a half times more, as a proportion of their income, on housing at the age of 25 than the generation born immediately after the Second World War spent at that age. For previous generations, housing costs as a proportion of income have declined as individuals enter their 30s.
Of course, there have been many social and economic changes between generations that could delay buying a house. Younger generations are entering the labour market later, are less likely to live with a partner and are having children later, all of which could delay the decision to buy; conversely, they could themselves be delayed by housing costs.
Adjusting for these demographic differences does account for some of the home ownership differences between generations, but there remains a large difference between home ownership rates and this is compounded by rising house prices, particularly in London and the South East. Young adults must either buy or rent their housing in an over-inflated housing market or live with their parents for much longer than was considered usual by previous generations, the committee was told.
Age UK told reminded the committee not to forget older people, with housing suitable for them also in short supply and the Centre for Ageing Better said that the biggest increase in demand in the coming decades will be from older people yet most existing homes do not need the needs of people as they become frailer.
It is that lack of supply overall that is the problem, according to others who spoke to the committee. It heard that the UK has been building fewer new homes than in comparable countries for four decades. Christian Hilber, Professor of Economic Geography at the London School of Economics (LSE), told the committee that the underlying problem was that supply constraints have become extremely pertinent over the last couple of decades.
The report concludes that the Government is not taking the action needed to ensure that there is a sufficient supply of affordable housing. In particular, action needs to be taken to substantially increase the supply of social housing. One means of doing this is to ease the ability of local authorities to borrow to fund housing building. This lack of action on housing is primarily hurting younger generations. However, younger generations can be helped by building more housing which is accessible and adaptable for older generations as part of a wider increase in supply.
When it comes to renting a home the committee heard that there is a lot of insecurity with young people wanting to be able to have longer tenancies. Professor Karen Rowlingson pointed out that families can be asked to leave their homes with two months notice and have to move away from schools and friends to find alternative accommodation. And the committee heard that children who move home more frequently do less well in school and if they move often whilst very young can miss out on key vaccinations and some adults are delaying the decision to have children due to living in the private rental sector.
The report acknowledges that the Government is taking a number of steps to try and improve the private rented sector but it concludes that the Government’s proposed reforms do not create a regulatory framework that will provide private tenants the security they need.
This particularly affects young people who are unable to buy and becomes a greater problem as they age. Change is needed so that renters who want a long-term secure tenancy can find one, it says.
The report is a wake-up call, for all concerned from landlords, to councils and to Government. The problem of supply is not going to go away. We cannot be certain that the current target of building 300,000 new homes a year (which is a figure only for England) by the mid 2020s will be met.
Certainly, the needs of older people are not being fully addressed. I personally know too many older people living alone in large family homes that they cannot afford to maintain and often in areas not near local amenities like shops, health centres and social networks. Yet they don’t move. Now, this can be a mixture of not wanting to leave the family home and its memories, but the lack of suitable homes must be one of the bigger issues. We have to help younger people onto the housing ladder, whether buying or renting, but also plan for older people and I don’t think we are doing that.
